Sometimes You Simply Root For Sideways Stock Movement

Options in the stock market are something I enjoy using from time to time simply to generate cash. I actually really like them. Especially when a stock is trading in a range that already has you showing a profit on paper, you can generate wads of cash doing it this way.

I always sell options contracts. I never buy them. Or at least I rarely do.

Cypress Semiconductor is one such stock that has been trading rather nicely in the past month or so, and so I decided it was time to generate some additional cash and sell some contracts on the underlying stock.

I made a pretty little penny, and I want to do it again next month as well on this one. I sold covered calls with a $15 strike price for February. It is trading today at around $14.15 and the expiration is of course about 30 days away.

So I am keeping my fingers crossed that the stock continues to rise a little bit of course, but also trades a bit sideways until the calls expire. The beauty of these things is that even if the stock is at $14.99 on the day of expiration, it is unlikely I will be called. I get to keep my shares, continue to earn dividends on them, and when I go to sell March contracts hopefully I'll be close enough to the mark to sell them at a $16 strike price.

Best of all worlds.

The key for me is simply to get as much out of any stock I own as I possibly can. That's the plan for Cypress Semiconductor. There's another currently on my radar, but I don't like the market price right now for it's calls.

In due time. I am patient, and the contracts I sold for Cypress should more than allow me some time to wait to pull the trigger on the other candidate.

Photo credit: Image is from Springboard Images.